Should You Rent or Buy a Home?
Compare the advantages of renting and buying a home.
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Has the busted real estate bubble left you feeling confused about whether to rent or buy a home? Maybe there’s something nagging at your subconscious asking, “Am I throwing my money away by renting?” or “Is the American dream of home ownership really so dreamy after all?”
Well, just like many issues in personal finance, the answer to whether you’re cut out to be a homeowner is “it depends.” It depends because your financial situation, goals, and lifestyle are unique. There’s no right or wrong answer, nor is there a cut-and-dried way to compare the cost of renting to the cost of owning a home. In this article we’ll cover the advantages of renting and buying and I’ll give you some great resources, so you can explore what’s best for you.
Should You Rent a Home?
Homes to rent come in all shapes and sizes, from large single family houses in the country to one bedroom efficiency apartments in the city. No matter where you want to live, there are landlords and management companies that can hook you up. Here are five reasons why signing a lease instead of a mortgage might be a good move for you:
Renting Pro #1: Flexibility
Having flexibility is the best part about being a tenant. Landlords usually want year-long commitments; however, most leases have fairly painless termination terms, such as a 30-day written notice. There’s a lot of freedom—literally and psychologically—to being able to pick up and go. You could take that out-of-state promotion or move back home if your Hollywood career doesn’t work out. On the other hand, if you’re a homeowner and want to pull stakes, you’re usually stuck until you sell the property or find a reliable tenant to help you pay the mortgage.
Renting Pro #2: Low Upfront Cost
The second pro for renting is why most people start out as renters—a low upfront cost. A security deposit plus a month or maybe two months of rent is usually all the money you need. That’s a whole lot cheaper than what it takes to buy a home.